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Money managers under the microscope

Staying long

July 13, 2009

The mammoth rally we had in Q2 may be starting to falter — the FTSE 100 is now below 4,200, having hit 4,500 last month — but Octopus’s David Crawford is sticking with a 60 percent net long position.

rtx9m6rCrawford made part of his Absolute Return Ucits III fund’s 71.1 percent return (since launch last March) by shorting stocks in 2008 and by going net long four months ago.

And while the recent downturn is painful, Crawford says he “wouldn’t want to sell” at these levels.

He believes equities in general are good value and price in most of the disappointing economic news to come, while short ideas are hard to find.

His recent call has been to switch his equity exposure — from cyclicals, which has surged in the Q2 rally, to defensives such as pharmaceuticals.

(See also Jabre upbeat (but not quite bullish) on stocks and Watch BlackRock’s Mark Lyttleton give his market view)

Comments

We know the game – Octopus continue wasting their subscribers’ money to prop up failing businesses. Exits are possible, the key is to have sound and robust portfolio. Octopus are injecting money in most of their projects to keep them going, so is that what Octopus mean by ‘staying long’? Staying long at the expense of what? Where’s the guarantee that upon exit some of these failing businesses will achieve at least their nominal value? Staying long is a weird idea, but understandable in the case of Octopus. What can they say about their phenomenal basket-case investment -Gloucestershire-based publisher The History Press? The company has been losing money to the tune of £1 million per year – for the last 2 years. It’s an indictment on Octopus incompetence and casino-style investing. They obviously feel happy and comfortable wasting other people’s money. So, yes, ‘stay long’ – keep throwing good money after bad, in desperate attempts to keep some of your equity projects afloat.

Posted by JSimpson | Report as abusive
 

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